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Russian rouble falls on concerns about oil exports
On Thursday, the Russian rouble fell sharply in relation to the U.S. Dollar and the Chinese yuan due to market worries about future oil revenues after U.S. pressure was applied on India and China. Donald Trump, the U.S. president, said that on October 15, Indian Prime Minister NarendraModi had promised to stop purchasing oil from Russia. He would then try to convince China to do the exact same thing. The rouble fell by 1.7% against the U.S. Dollar in the over-the counter market and by 2% to 11,20 against the Yuan at the Moscow Stock Exchange where the Chinese currency is the most actively traded foreign currency. The rouble strengthened this week to its highest level since July, on the back of a decline in demand for foreign currencies from importers. Fears of a possible future decline in oil revenues led to some profit-taking, which had a direct impact on the thin Russian markets, said a Russian currency trader who declined identification. Another currency dealer stated that "our illiquid market broke", mainly because there was a general feeling of inadequacy about the recent strengthening the rouble. The rouble has not reacted to the news that Trump is to hold a telephone call with Russian president Vladimir Putin on Thursday evening, just a day before he hosts Ukraine's Volodymyr Zelenskiy at the White House. (Reporting and editing by Gareth Jones, Gleb Brynski)
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Peru's new President faces protests that resulted in dozens of injuries and one death
The state ombudsman’s office reported on Thursday that at least one person died and dozens were injured during protests in Peru overnight against President Jose Jeri who took power only days before. The protest, organized by Gen Z, civil groups and transport workers, took place on Wednesday night. It was part of a series against rising crime and corruption that culminated in the dramatic ouster at midnight of the former president Dina Boluarte, last Thursday. Around the country, thousands of protesters gathered. Hundreds clashed with police in front of Congress in Lima. The police fired tear gas, while protesters hurled rocks, fireworks and burning objects. "Everyone must leave!" "Everyone must go!" protesters shouted when they reached Congress, and then tried to tear down the metal barriers protecting it. This led to clashes. The Ombudsman's Office confirmed that a 32-year old man, Fernando Losada was killed in the protest. It said the death will be investigated. The Peruvian prosecutor's said that Losada died after being shot but didn't say who fired. Jeri posted on X that she was sorry for the death and said it would be investigated "objectively". Jeri had earlier claimed that 55 police officers were injured and 20 civilians in the protest. She blamed "delinquents" who "infiltrated peaceful demonstrations to sow confusion." He wrote: "The full force will be on them." The protests on Wednesday were a good indicator of how Jeri’s presidency could end next July, due to elections. Jeri has pledged to put crime at the top of his agenda, but he has been involved in a number scandals, including allegations of corruption and an investigation that has now been shelved for sexual assault. Jeri, 38, has expressed his willingness to work with any investigation into corruption. He has also denied wrongdoing and a number of scandals. Boluarte was met with widespread protests when she took power late in 2022. This led to dozens deaths and a drop in her popularity, which fluctuated between 2% to 4% during the days before her removal. Congress, which Jeri led before becoming president, is also unpopular. It has a one-digit approval rating.
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Kazakhstan freezes fuel and utility prices amid inflation
Kazakhstan's Government announced on Thursday that it would freeze the price of some diesel and petrol as well as suspend utility tariff increases until 2026. This is due to the double-digit inflation rate continuing to increase. In a Telegram statement, the government announced that price freezes for diesel and AI92 gasoline will remain in effect until inflation stabilizes. It also said it would increase funding for the domestic agriculture to help prevent any price increases on what it called "socially important" food products. The government also claimed that it would reduce the tax revenue collected by small businesses, and make affordable mortgages more available. Inflation rates in Kazakhstan, which is a mineral giant and produces around 2% the world's supply of oil, were 12.9% in September. This was significantly higher than those in Russia, Kazakhstan's neighbour and main trading partner, where the prices have risen since the start of the war in Ukraine. Kazakhstan's central banks raised rates last week to an unprecedented 18%. Since the invasion of Ukraine, inflation has also spiked in other Central Asian countries with economies that are closely tied to Russia. The price of LPG soared suddenly in January 2022, causing the worst unrest in Kazakhstan since 1991 when the 20-million population gained independence from the Soviet Union. The fuel price protests that year grew to widespread unrest and hundreds of deaths. Russian troops were deployed to restore order.
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Gold reaches new records as Fed rate-cut betting drives gold to record highs
Gold reached a record-high for the fourth consecutive session on Thursday as investors flocked into the metal of safety due to brewing U.S. China trade tensions, and the U.S. Government shutdown. Bets on interest rates cuts also fueled the momentum. As of 09:10 am, spot gold was up by 0.8% to $4,242.65 an ounce. ET (1310 GMT), after bullion reached a record high earlier of $4,254.61. U.S. Gold Futures for December Delivery were up 1.3% to $4,256.70. Yellow metal is up over 60% in the past year, thanks to geopolitical tensions and aggressive bets on rate cuts, central bank purchases, dedollarisation, and strong ETF flows. The rate-cut scenario heading into 2026, as well as developments surrounding U.S. China will determine the trajectory of gold. "If no deal is made between the U.S. and China, the relationship will continue to deteriorate. That could be what gold needs to break the barrier of $5000/oz," said Zain Vwda. Analyst at MarketPulse. This week, investors have been focused on the U.S.-China Trade Spat. Washington criticised China's increased rare earth export controls on Wednesday as a danger to global supply chains. Traders have priced in a rate cut of 25 basis points by the U.S. Federal Reserve in October and a second in December with probabilities as high as 98% and 95%. Gold that does not yield is usually a good investment in an environment with low interest rates. Vawda stated that short-term gold pullbacks are likely to be temporary as bullish investors use dips to enter positions. HSBC increased its forecast for the average price of gold in 2025 to $3,355 per ounce, citing geopolitical tensions and economic uncertainty, as well as a weaker U.S. Dollar. The ongoing U.S. shutdown has also halted the release of scheduled economic data. A Treasury official warned that the loss in output could be as high as $15 billion per week. Silver spot fell by 0.2%, to $52.96 an ounce. It had hit a record high $53.60 per ounce on Tuesday. The rally in gold was mirrored and the tightness of the spot market supported this decline. Palladium rose 1.8%, to $1,564.00, while platinum was up 0.7% at $1,665.24. (Reporting and editing by Vijay Kishore in Bengaluru, Sherin Elizabethvarghese from Bengaluru)
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HSBC increases average gold price forecasts 2025 and 26
HSBC raised its forecast for the average price of gold in 2025 to $3,355 from $3,215 because of safe-haven demand fueled by geopolitical tensions and economic uncertainty. In a note from October 15, the bank stated that "sentiment is bullish" as it expects rallies to continue into 2026, aided both by buying from the official sector and demand for gold among institutions as a diversifier. HSBC has also increased its forecast for the average 2026 gold price to $3.950 from $3.125. GOLD HITS A NEW RECORD HIGH HSBC reported that the demand for gold is increasing due to mounting fiscal deficits across major economies, including the U.S. Gold has been traditionally viewed as a safe haven during economic and geopolitical instabilities. Its value has increased by over 60% this year and reached a new record of $4,250.89. China accused the U.S. on Thursday of inciting panic over Beijing's controls on rare earths and said Treasury Sec. Scott Bessent made "grossly distortion" remarks about an important Chinese trade negotiator. The Chinese rejected a U.S. request to roll back curbs. HSBC stated that "central bank demand will likely remain high due to geopolitical risk and dollar diversification but lower than peak levels in 2022-23". HSBC stated that a lower rate cut than the Federal Reserve's current projections for this year or next could dampen the rally. Investors have priced in a rate cut of 25 basis points at the Fed meeting this month, and expect another in December. HSBC stated that the gradual decline in global inflation could also dampen jewelry purchases, which are driven by inflationary fears. The bank also maintained its average 2025 price forecasts of palladium and platinum at $1,100 and $1,215, respectively. Reporting by Noel John, Bengaluru. Editing by Mark Potter
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Gold prices spike in India before festivals, causing a surge in gold smuggling
Government and industry officials said that gold smuggling in India had increased ahead of major festivals. This was due to the record high prices and supply shortages. Import taxes on gold have been reduced to 6%, down from 15% in the past year. Customs and Directorate of Revenue Intelligence officials (DRI), however, said that smuggling had increased in the last few weeks. Several attempts to smuggle were foiled at Indian airports. A bullion dealer in Chennai said that smugglers are now able to convert gold quickly and easily, thanks to the strong demand for festival gifts and limited supplies. This month, Indians will celebrate Dhanteras (Diwali) and Diwali (Dhanteras), festivals when purchasing gold is considered auspicious. These are also the busiest days to buy the precious metal. On Thursday, gold prices in India reached a record of 128,395 rupees for 10 grams. This marks a 67% increase so far this season. Smuggling gold at this price is lucrative for grey-market operators. They can make more money by avoiding the 6% import tax and a local sales tax of 3%. "The payoff is super tempting for them," said an unnamed senior bullion trader in Mumbai. The margin for smugglers has fallen to 630,000 rupees a kilogram after the import duties were reduced in July. The bullion dealer stated that investors are now chasing after gold, causing a shortage of supply and driving up premiums. A jeweller in Kolkata said that banks were unable to satisfy the demand for the stock and charged very high prices. This week, Indian dealers quoted a premium. The price of gold can be up to 25 dollars per ounce more than the official domestic prices. This is the highest since at least a decade. The government registered 3,005 gold-smuggling cases in the fiscal year 2024/25 that ended in March. They also seized 2.6 tons of this metal. (Reporting and editing by Alexander Smith; Rajendra Jadhav)
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EU to provide support to countries affected by Carbon Border Levy
The European Union is offering development funding to countries that are affected by its carbon border tax, said the European Commission on Thursday. It was an attempt to calm the concerns of developing economies about the policy. Next year, the EU's Carbon Border Adjustment Mechanism (CBAM), which will be imposed on CO2 emissions from imported goods such as steel and cement, will begin to impose fees. Brazil, South Africa, and India have all criticised the measure, saying it penalizes developing economies. In a document published Thursday that outlines the EU's priority on climate and energy diplomacy the Commission stated it would support countries via "Global Europe", an international development programme funded by the EU budget of 200 billion euros ($233 billion). EU SAYS IT WILL NOT BACKTRACK BUT IS NOT DEAF TO CONCERNS The document stated that "Global Europe intends to maximize its contribution to the decarbonisation and adaption needs of developing countries while CBAM gradually becomes applicable." It said that "this would help ease concerns raised about EU legislation, as well as strengthening partnerships and supporting broader regulatory reforms." The EU Carbon Border Levy could be reduced by helping developing countries reduce emissions and switch to clean energy. Dan Jorgensen, EU energy commissioner, said that the bloc will not remove its climate laws to satisfy trading partners. He said that Brussels was more interested in investing in clean industries which could be beneficial to both sides, such as the production of renewable energy and hydrogen in Africa, which it wants to import. In an interview, Jorgensen said, "To the extent we can help these nations, we'll be very open, both in terms of looking at possible funding arrangements but also in terms of technical assistance." He added, "We are not going to go back on our green transition... But we are not deaf to the worries of partners." The EU document also outlined plans to engage businesses in the bloc's diplomacy on energy and to identify priority clean tech investments overseas, as Europe attempts counter China's dominance of manufacturing green technologies like batteries and solar panel.
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CMC purchases Foley Products at $1.84 Billion in a wave of building products deals
Commercial Metals Company announced on Thursday that it would acquire the concrete supplier Foley Products Co. for $1.84 Billion in cash. Dealmaking is accelerating across the U.S. construction products sector as a result of a drive for scale and local supply chains. The Irving, Texas-based company said that it expected the Foley acquisition to have a positive impact on earnings and cash flows and deliver annual EBITDA synergies between $25 million and $30 million. Dealmaking has increased in the U.S. construction products industry as companies look to scale and local supply chain to offset tariffs. Demand is supported by new housing and repair and renovation. Last week, the roofing-materials firm TopBuild SPI bought rival SPI in exchange for $1 billion cash Earlier this year, Home Depot's unit acquired specialty-building-products distributor GMS for about $4.3 billion in June, while QXO clinched an $11 billion deal for Beacon Roofing Supply in March. CMC reported that it had beaten Wall Street's expectations for its fourth quarter adjusted profit. Earnings of $1.37 per common share compared to the analysts' expectation of $1.36, according data compiled by LSEG. In premarket trading, shares of the company rose 1%. Foley provides precast concrete and concrete pipes used in site infrastructure, such as utility connection, water supply and Stormwater Management. Newnan-based Georgia company operates 18 locations in nine states of the U.S. Southeast. It also has a presence throughout the Central and Western Regions. CMC was advised by Moelis & Company as its financial advisor and Akin, Gump as its legal counsel.
China's unusual copper export boom signals more than weak need: Andy Home
An unusual burst of Chinese exports has actually deflated bull spirits in the copper market, with funds disposing long positions and rates down by 16% from the record highs seen in May.
The world's biggest buyer of copper shipped out an extraordinary 158,000 metric tons of refined metal in June. First-half exports of 302,000 loads were currently greater than any complete calendar year considering that 2019.
This break of normal trade patterns has actually punctured a bull story of constrained supply and cyclical demand healing. Weak Chinese getting managers indices reveal that activity in the nation's production sector sank to a five-month low in July, enhancing Medical professional Copper's bleak message.
Yet need weak point is just part of the story. Fast-rising domestic production and a flood of African imports have filled the regional market. And then a relentless squeeze on the CME contract in May opened a similarly unusual export arbitrage window for that excess to drain.
EXCESSIVE COPPER
China produced 5.9 million tons of refined copper in the initially half of the year, according to local data company Shanghai Metal Market. That represented year-on-year development of 6.5%, comparable to an extra 359,100 lots. The robust development rate runs counter to expectations that domestic production would fall after the nation's smelters dedicated in March to cut output due to tight basic materials supply.
It holds true that lots of smelters have actually taken upkeep downtime in current months, however the cumulative effect has actually just been a. small amounts of the supercharged rate of expansion.
Increasing smelter output has coincided with a period of high. fine-tuned copper imports.
Although the export burst has actually substantially minimized China's. net contact the worldwide market, the nation's imports have. stayed strong. Volume increased by 16% year-on-year to 1.9 million. tons in the first 6 months of 2024.
China likewise imported significantly more scrap copper, volume. increasing by 18% year-on-year to 1.2 million loads in. January-June.
Chinese demand would have had to be super-strong to take in. the synchronised combination of more domestic and more import. supply. Clearly, it wasn't strong enough.
THE INCREASE OF THE CONGO. The core motorist of China's greater metal imports has actually been the. Democratic Republic of Congo (DRC). The country in 2015. surpassed Peru as the world's second-largest copper producer and. shipped more metal to China than leading manufacturer Chile.
Trade streams in between the two countries continue to. accelerate, with China's imports jumping by 91% year-on-year to. 698,000 loads in January-June. The June tally of 150,000 heaps was. a new regular monthly record.
Offered China's dominant role in DRC's copper-cobalt mining. sector, trade circulations in between the 2 nations are unsurprising.
However, it's likewise the case that there is no other. comparable market for Congolese copper, including the world's. huge three exchanges.
The London Metal Exchange (LME) currently has just one. Congolese brand on its excellent delivery list - SCM, produced by. La Sino-Congolaise Des Mines with annual capability of 82,400. loads.
DRC copper is not deliverable against either the CME or. Shanghai Futures Exchange (ShFE) agreements.
With Chinese demand insufficiently strong to take in surging. imports, Congolese metal has actually washed around the domestic market,. dragging down both premiums and prices to the hinderance of regional. smelters.
( NOT) GOOD SHIPMENT
CME's minimal good-delivery list of copper brand names is one. factor the U.S. agreement got squeezed so terribly in the second. quarter.
Stocks was up to just 8,117 tons at the start of July, as. shorts found their capacity for physical delivery largely. restricted to U.S., Canadian or Latin American brand names.
Stock has because rebuilt to 23,620 tons, but it has actually been. a painfully slow process.
When the squeeze was at its most severe in May, CME copper. was trading at a premium of $1,100 per heap over LME copper. Both. were priced much greater than the well-supplied Shanghai market.
The net outcome was a rare export window for Chinese. manufacturers to ship surplus metal.
China shipped 16,000 tons of refined copper to the United. States in June, which is an exceptionally uncommon phenomenon. However. the metal can't be provided against CME shorts given that the. exchange has no Chinese brands on its great shipment list.
Nevertheless, Chinese metal can be delivered to the LME, which. presently accepts 22 Chinese brand names of copper.
Most of what China has exported has actually headed to South Korea. and Taiwan, both LME good-delivery locations.
LME stocks consisted of just 400 tons of Chinese copper in. February. That mushroomed to 121,700 tons at the end of June,. with Chinese metal accounting for almost 54% of overall signed up. inventory.
Existed seamless physical arbitrage between the CME, LME. and ShFE, China could have delivered straight to the CME, or. diverted excess Congolese copper to the United States.
The reality has actually been a tortuous reconciliation of regional. imbalances. Chinese surplus is transferring to the West however largely. by means of LME storage facilities in Asia. The LME a minimum of is emerging as a potential market of last. resort for Congolese copper. It received its very first 500 lots of. SCM brand name metal in June. Other Congolese manufacturers, including. China's CMOC, are looking for to list their brand names.
The CME good-delivery list, by contrast, accounts for a. diminishing share of global production.
Experts at BNP Paribas compute the volume of deliverable. copper has avoided seven million lots in 2010 to around 4. million.
The CME has the disadvantage of operating just domestic. good-delivery points, leaving it exposed to wider U.S. trade. policy against China, Russia and other countries deemed. bothersome.
But while physical delivery alternatives remain restricted, a. repeat of the May squeeze is not inconceivable.
OPTICAL ILLUSION
Checking out Chinese copper exports as a basic signal of weak. need misses out on the effect of the extraordinary squeeze on the CME. and the divergence in good-delivery options on the three. exchanges.
Chinese copper need might be slower than expected but it. hasn't fallen off a cliff. State research house Antaike is. forecasting 2.5% growth in usage this year.
China's export burst, on the other hand, seems unwinding,. with outbound shipments falling to 70,000 loads in July.
ShFE stocks have been sliding considering that the start of July, and. at 262,206 tons are now 75,000 heaps below the June peak.
The Yangshan import premium << SMM-CUYP-CN >, which fell into. unfavorable area in May, has actually risen to $53 per ton.
It may not be too long before some of what China has. exported turns around and heads home.
The opinions expressed here are those of the author, a. writer .
(source: Reuters)